#S4HANA use case series: 3a – market to a segment of one (biz view)
Markets are shifting towards digital, society accordingly. Nowadays, customers are well informed, tech-savvy and search for ways to ease up their daily life. Their smartphones play a vital role in their life and are able to bundle many products (digital and physical) in one single device. This evolution offers a chance to rethink and re-design offerings to customers.
A digital offering for example is a service that follows these 5 principles:
- The value is offered as a service, not as a product.
- The value is delivered per request.
- Service scales up and down according to demand
- Customers pay per usage. Not a fixed cost.
- Available from anywhere at any time.
From USP to ISP
Classical marketing campaigns too often only highlight the unique selling proposition (USP) of a product which is the benefit of a good or service that differentiates it from competitors and gives customers a logical reason to prefer it over a competitive product. But it doesn’t really address the individual needs of customers.Why? Because customer information is not available in one place, thus stored in different silos, thus the needs of every individual cannot be addressed (at once in one single message). ISP (Individual Selling Proposition) is becoming the new black. But to get there, mass volumes of digital customer engagement information from social networks, location services, check-ins, buying history etc. have to be leveraged for deeper insights to deliver a one-to-one personalized customer experience which – by the way – gets more important than the product itself in some areas.
Today to be effective, ensure growth or sometimes even to survive – you need to cater to the “segment of 1”. The individual – his expectations and buying behaviors – need to be the center of your approach. Not only in services, all the way to planning, production and your ability to deliver (your sourcing and supply chain). But let us start at the engagement point:
Marketing organizations that already practice it and excel at cross-channel integration and data-driven marketing, achieve up to 61% greater revenue from new customers and 32% lower marketing spend. A well-known car manufacturer for example follows up with a personalized engagement piece using data from the customer’s profile, even when customers just configure but do not purchase a car in the end. This special treatment points to those who are actually in the position to buy a car. The use of predictive analytics identifies purchasing patterns to narrow down the customers that have the highest purchase likelihood. This ensures maximum marketing budget efficiency and puts the individual customer and his preference at the center of the message.
Unique Value of embedded real time analytics
With SAP S/4HANA real-time contexts can be leveraged to collect data from various sources, analyze patterns and drive relevant engagements with known and unknown contacts and develop the full context of individual customers for individualized engagements at every stage. Real-time insights into intents help to run campaigns with speed and agility. Adjustments are possible while the campaign is running and the lead is hot – not only the next day, where you see how your campaign works out.
Understanding marketing activity performance can help to plan resources for customer advocacy and growth and can result in 24% higher revenue growth from new customers and 30% higher growth in market share. Real-time operational insights and collaboration can result in 22% less effort to market and sell products more efficiently.
From USP to ISP
Blending of structured and unstructured data from internal and external sources like sensors, payment information, purchase history and social media likes enables you to gain deeper and more comprehensive understanding of true customer value. Engagement with each customer in a more personal and relevant manner is needed. And not only in B2C scenarios. Even in B2B you need to be much more reactive to the changes of your customers, or the customer of your customers demand.
With adequate real-time context collected and processed by your solution, leveraged to collect data from various sources, analyze patterns and drive relevant engagements and collaborations with known and unknown contacts – today you need to be able to develop the full context of individual customers for individualized engagements at every stage. Blending of structured and unstructured data from internal and external sources like sensors, payment information, purchase history and social media likes enables you to gain deeper and more comprehensive understanding of true customer value, effective data driven marketing and customer lock-in.
But as stated above, you need to ensure you think your processes end-to-end.Starting from sourcing, to production to supply. In the B2C business, the companies receive the end customer orders through a web shop, call center or cell phones. The most valuable “product” for many. The major difference to the classical approach is that usually the order quantity is 1 piece and the delivery time tends to be very short. But many companies are challenged by this customer expectation, the segment of 1 – also in the B2B scenario.
Obviously an order quantity of 1 piece has a major effect to the business process (Material requirements planning, production, packaging, shipping). Often the processes in the companies are optimized for production and delivery for superior quantity as 1 piece – a big problem when you are facing the digital transformation impact. Those changes are also increasing the related documents significantly (Production orders, delivery notes, goods issues, goods receipts…).
“Most valuable product” and end-to-end needs
In order to ensure profitability, the B2C or B2B orders have to run in real time within a company as so called ‘No touch order’. Meaning the majority of those orders have to run through the business without any human interaction. In order to fulfill those requirements companies need a real-time business, meaning accurate update inventory information (best in real-time), high frequent fast MRP runs and an efficient way to handle back-order. A manual process is only required when unforeseen problems (e.g. credit limit check, Availability to promise Check) are occurring.
When looking at the business process view in detail multiple differences become obvious between the traditional ERP system and the newly developed solutions that run in real-time with the qualities you will see in the tech-blog to this use case.
Same actually at the point of engagement which happens in omni-channel fashion today: too often scattered and inaccurate customer data has to be collected manually from multiple non-integrated processes and channels. This makes a cross channel execution of marketing processes and collection of personalized customer engagement data to a huge effort. Lack of visibility into marketing performance and lack of time to make changes lead to a very low agility level of the companies and their ability create value for their customer and increase their profit in a very dynamic environment.
Even equally important to ensure your core systems can react to this high and volatile demand, up to the last second. With a one stop shop for personalized customer information, generated in real time and across fully integrated processes and channels you are now equipped for a seamless execution and orchestration of your marketing processes throughout your customers journey. By delivering personalized experiences to the customer, making real-time recommendations and detailed tracking of the performance brings the value to your customers and give you a competitive advantage compared to your competitors.
You can check back to the former 2 use cases via the link below – so you understand that this processes fit nicely together. High and volatile demand – flexible core processes. Welcome to the digital economy. Let us look with the blog 3b to the technical implications.
Stay tuned for the next use cases and follow me via @SDenecken for latest news.
Overview of SAP S/4HANA use cases: #S4HANA – the use case series – Intro & Overview